The port regulator, set up under the Major Port Trusts (MPT) Act, has been facing criticism for its interference in tariff fixation by major ports. P&O Ports India, which is leading a consortium operating the Nhava Sheva container terminal and is the sole bidder for Kochi terminal, has even called for doing away with TAMP.

The rationale behind the recommendation is that tariff setting methodology for similar services should equally apply to all competitors in similarly situated business environments.

In its draft final report to the ministry of surface transport, the team belonging to the United States-based Cornell Group favoured a significant role for TAMP in the privatisation of the major ports.It should be allowed to examine and approve tariffs levied by private operators.

However, the privatisation process of formulation of bidding documents, conducting tender process, negotiation of terms with successful bidder should be conducted by an agency other than TAMP.

In order to streamline the regulatory framework for the port sector, the group said that regulatory agencies should be set up at the state level and TAMP should coordinate with them on tariff regulation, conservancy and productivity issues.

The ADB-appointed consultancy group pointed out that TAMP should define tariff setting principles and regulate compliance instead of framing specific rates and tariffs until such time that adequate competition makes this function unnecessary.

Making a case for comprehensive role for TAMP in the port sector, the group said nowhere in the world a national port regulatory body had been set up exclusively for tariff fixation. Where strong national regulatory authority exists, coverage extends to mostof the ports in the country, including private ports, and its scope is more comprehensive than just tariff regulation.

TAMP should also follow its practice of endorsing prevailing rates and not attempt suo moto to calculate precise, cost-based terminal rates, said the report.

The group said that extending jurisdiction of a Central agency like TAMP over minor ports would be possible only in the form of consultation between the concerned states and the Centre.

Hinting at the need to set up regulators at state level for minor ports, it saw a possibility of extending the TAMP scope to appeal against decisions of state regulators.

Minor ports, falling in the concurrent list of the Constitution are primarily the responsibility of state governments until notified as major ports by law.

TAMP, which has been created by the MPT Act, has regulatory authority over those ports which are set out in sub-section 3 of section 1 of the Act. The Cornell Group, therefore, felt that the Indian Ports Act of 1908 shouldbe amended to extend TAMP jurisdiction over major ports to which MPT Act will be inapplicable after corporatisation.

Emphasising the need to enforce the TAMP decisions on tariffs and related matters, the group recommended that TAMP should be allowed to summon witnesses cross-examine, order discovery of documentary evidence, order attachments and impose penalties.